Section 5-20-1-16 - Capital reserve fund(a) The authority may create and establish one (1) or more special funds, referred to in this section as capital reserve funds, to secure the notes and bonds. The authority shall pay into each such capital reserve fund: (1) any moneys appropriated and made available by the state for the purposes of such fund;(2) any proceeds of sale of notes or bonds, to the extent provided in the resolution of the authority authorizing the issuance thereof; and(3) any other moneys which may be made available to the authority for the purpose of such fund from any other source or sources.(b) All moneys held in any capital reserve fund, except as otherwise specifically provided, shall be used, as required, solely:(1) for the payment of the principal of bonds of the authority secured in whole or in part by such fund;(2) for payment of the sinking fund payments mentioned in this section with respect to such bonds;(3) for the purchase or redemption of such bonds;(4) for the payment of interest on such bonds; or(5) for the payment of any redemption premium required to be paid when such bonds are redeemed prior to maturity. However, if moneys in such fund at any time are less than the capital reserve fund requirement established for such fund as provided in this section, the authority shall not use such moneys for any optional purchase or optional redemption of such bonds. Any income or interest earned by, or increment to, any capital reserve fund due to the investment thereof may be transferred by the authority to other funds or accounts of the authority to the extent such transfer does not reduce the amount of such capital reserve fund below the capital reserve fund requirement for such fund.
(c) The authority shall not at any time issue bonds secured in whole or in part by a capital reserve fund, if, upon the issuance of such bonds, the amount in such capital reserve fund will be less than the capital reserve fund requirement of such fund, unless the authority, at the time of issuance of such bonds, deposits in such fund from the proceeds of the bonds to be issued, or from other sources, an amount which, together with the amount then in such fund, will not be less than the capital reserve fund requirement for such fund. For purposes of this section, "capital reserve fund requirement" means, as of any particular date of computation, an amount of money, as provided in the resolutions of the authority authorizing the bonds with respect to which such fund is established, which amount shall not exceed the average of the annual debt service on the bonds of the authority for that calendar year and succeeding calendar years secured in whole or in part by such fund. The annual debt service for any calendar year is the amount of money equal to the aggregate of (1) all interest payable during such calendar year on all bonds secured in whole or in part by such fund outstanding on the date of computation, plus (2) the principal amount of all such bonds outstanding on said date of computation which mature during such calendar year, plus (3) all amounts specified as payable during such calendar year as a sinking fund payment with respect to any of such bonds which mature after such calendar year. This calculation shall embody the assumption that such bonds will, after such date of computation, cease to be outstanding by reason, but only by reason, of:(1) the payment of bonds when due; and(2) the payment when due of all such sinking fund payments payable at or after such date of computation. However, in computing the annual debt service for any calendar year, bonds deemed to have been paid in accordance with the defeasance provisions of the resolution of the authority authorizing the issuance thereof shall not be included in bonds outstanding on such date of computation.
(d) To assure the continued operation and solvency of the authority for the carrying out of the public purposes of this chapter, the authority shall accumulate in each capital reserve fund an amount equal to the capital reserve fund requirement for such fund.(e) In computing the amount of any capital reserve fund for the purposes of this section, securities in which all or a portion of such capital reserve fund is invested shall be valued at par, or if purchased at less than par, at their cost to the authority.(f) Notwithstanding subsections (a) through (e), the authority, subject to such agreements with noteholders or bondholders as may then exist, may elect not to secure any particular issue of its bonds with a capital reserve fund. Such election shall be made in the resolution authorizing such issue. In this event, subsections (b) and (c) shall not apply to the bonds of such issue in that they shall not be entitled to payment out of, or be eligible for purchase by, any such fund, nor shall they be taken into account in computing or applying any capital reserve fund requirement.Amended by P.L. 136-2018,SEC. 37, eff. 7/1/2018.Amended by P.L. 42-2011, SEC. 4, eff. 4/20/2011.As added by Acts1978 , P.L. 28, SEC.1.